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STATE and Federal commitments to fix the Pacific Highway by 2016 appeared to be in tatters last night as the months-long battle over who should pay for the upgrade turned to ultimatums.

Federal Transport Minister Anthony Albanese said the Federal Government would pull $3.56 billion committed to the highway in this week's Federal Budget unless the NSW Government, which has been demanding the Commonwealth pick up 80% of the tab, matched the funding.

Not long after that, NSW Transport Minister Duncan Gay announced the State Government would not match the Commonwealth's investment, with a spokeswoman saying NSW "can't and won't" match the Federal funding.

Without a new injection of funding - estimated at between $7 billion and $9 billion - the highway upgrade will stall on its final seven unfunded projects, mostly between Ballina and Woolgoolga and including the deadly "tired zone" south of Ballina.

Mr Albanese said the money earmarked for the Pacific Highway would remain with the Federal Government's Nation Building program, but would be redirected to other projects.

Mr Albanese did not say what other projects the funding could be used for, but the Queensland Government has asked the Federal Government to match its $1 billion investment in the Bruce Highway.

"There are a range of states, including Coalition states, that are very keen for that to happen (for the Pacific Highway money to be redirected)," Mr Albanese said.

Meanwhile, the NSW government was continuing to insist the Federal Government had moved to a 50/50 funding split for political reasons and it had taken a different, more generous, approach with NSW Labor.

Ballina MP Don Page this week said the NSW Government had a copy of an agreement signed by the State and Federal governments in 2009 spelling out the 80/20 funding split.

However, when asked for a copy of it, a spokeswoman for Mr Gay was able to provide only copies of letters between Mr Albanese and former NSW Labor transport ministers Michael Daley and David Campbell.

A spokeswoman for Mr Page later said the agreement itself could not be publicly released.

Mr Albanese said three funding agreements signed by the state and the Commonwealth in 1996, 2004, and 2006 had all spelled out a 50/50 funding split although a nation building program agreed to in 2009 as part of the stimulus package had allowed a more generous split.

Read the correspondence between Anthony Albanese and NSW roads ministers: